Geopolitics and geoeconomics

Remember the good old days? Things seemed much simpler then even if a little confusing. may 21, 2018: “Duterte is the greatest beneficiary of the US military aid. Out of his fears that the US will abandon him in his dream dictatorship, he has continued with lopsided military agreements and utilization of the country as a battleground for terrorist aggressions in Asia, League of Filipino Students National Spokesperson Kara Taggaoa said.”

November 26, 2018 (Taiwan News): Philippine Senator Leila de Lima was quoted as saying “Our Presidential Palace is now the headquarters of China’s fifth column in the Philippines. It is no longer a Filipino President that holds office there, but a Chinese puppet.”

Another aspect of the “good old days” was that nations were supposed to pick sides as with choosing either the United States or the USSR. However, India, Egypt, and Yugoslavia in 1961 decided that walking a “middle course” between the two superpowers made more sense, signing on to the Non-aligned Movement principles agreed at the Bandung Conference. India became particularly good at walking the “middle course,” better known as “play both sides,” to get as much money as possible.

The Philippines joined the group in 1993, two years after the USSR was officially dissolved when there was not much left to be “non-aligned” about. Thirty-years later, though, the US wants to know friends from foe regarding China and Russia.

Ultimately, geopolitical relationships come down to where a nation’s private business are going to set up shop and which governments are going to encourage—or hinder—trade with other economies. Even long before the US made a deal for Saudi Arabia to use only US dollars to trade for oil in return for military aid, not having the US invade, and supporting the Opec cartel, geopolitics has been “geoeconomics.”

Corporations must try to stay ahead of the geopolitical curve to protect their businesses, and it is not always easy.

Willis Towers Watson (WTW) is a British-american insurance advisor company that publishes—with Oxford Analytica—a Political Risk Survey Report, last released in March 2022. Regarding “Regions of Political Risk Concern,” Europe, Russia, and CIS was barely on the radar with “Asia-pacific” (95 percent) as a grave concern. On a scale of 1 to 7 with “7” being “Most Risky,” China received a “7” and Russia only a “2.” How quickly times change.

Covid and the Russia-ukraine war have forced companies to reevaluate “risk.” China is losing corporate “friends” as evidenced by Apple moving some manufacturing to India and Vietnam. But the “West” is also, with WTW and Oxford Analytica finding that five fewer countries lean on the West today than they did so five years ago. Of the 61 countries assessed by WTW, 18 have attempted to be neutral.

January 4, 2023 (Foreign Policy Magazine): “But geopolitical neutrality today indicates that the countries feel they can achieve more by playing hard to get. But getting them may still be worth the effort. Friendshoring is accelerating, and Friendshoring requires friend-winning.”

September 15, 2022 (German Institute for International and Security Affairs): “It appears that the newly elected president is likely seeking to balance the Philippines’ relations with China and the US to a greater extent than his predecessor. This could open up new opportunities for cooperation between the Philippines and Germany and the EU.”